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Risk Management

Risk Management
March 3, 2020

How to Convince Business Units That ERM Has Real Value

Integrating it with strategic planning shifts perceptions that ERM is a bureaucratic exercise. Enterprise risk management (ERM) is often viewed by business leaders as a check-the-box exercise that interferes with the profit engines they’re seeking to run. A treasurer at a recent NeuGroup meeting who also chairs his company’s risk committee sought advice on how to convince the leaders of business units and other corporate entities that the ERM process adds value. Ed Scott, senior executive advisor at NeuGroup and…
Ted Howard
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Capital MarketsPension and BenefitsRisk Management
February 25, 2020

No Slam Dunk for Pension Fund Managers: Selling Leverage-Averse Boards on Overlays

The popularity of overlays is increasing in the US despite concerns of executive committees. Leverage is something of a dirty word in the world of pension funds and that, perhaps, presents the biggest challenge that pension fund managers face when seeking to persuade their companies’ executive committees to use overlays that use derivatives as a fund-management tool.At a roundtable of pension fund managers arranged by the NeuGroup, one participant said his team had begun to explore how to “de-risk” the…
Antony Michels
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Risk ManagementTechnology
February 6, 2020

Tales from the Cyber Crypt

Assistant treasurers exchange recent scary cyber tales of success and failure. In a breakout session at NeuGroup’s Assistant Treasurers’ Leadership Group focusing on securing companies from cyberattacks, members recounted recent experiences and the conundrums they face combating them. Digital protection, à la carte. NeuGroup’s own Scott Flieger, director of peer groups, said a fellow member of a college board who runs a cybersecurity advisory firm recommends companies make a menu of their digital assets, from bank accounts onward, and seek…
Ted Howard
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Risk ManagementTreasury Management
February 6, 2020

Crisis Management Brings Executives Together

Having a crisis response plan can help make the company more resilient now and later. Following a framework for crisis response planning that engages management as well as the board can create significant political capital for internal audit, not to mention better prepare the company for crises that may arise. Multipurpose framework. The head of internal audit at a major government contractor said in a recent NeuGroup meeting that his company uses the National Fire Protection Association 1600 Standard on…
Ted Howard
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Risk ManagementTreasury Management
January 30, 2020

Managing FX in Currency Tiers to Control Cost, Workload

Why one company’s treasury spreads currency management among teams for large exposures, currency clusters and “tier two” currencies. At a recent NeuGroup meeting of treasurers in Europe, one member shared how his company manages FX risk management-related costs and workload by considering currencies in tiers. Global policy, local execution. Generally speaking, at this company, corporate treasury at HQ is responsible for the framework and policies and the global hedging approach, but local (in-country) treasury staff implement the hedging strategy with…
Ted Howard
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Capital MarketsESGRisk ManagementSenior ExecutiveUncategorized
January 28, 2020

Activist Investors Who Care About More Than One Kind of Green

Founder’s Edition, by Joseph Neu Takeaways from a fireside chat with ValueAct founder Jeffrey Ubben. Based on a head’s up from a top Wall Street activist defense adviser, I went to an event earlier this month hosted by Refinitiv and Reuters Breakingviews that featured a fireside chat with ValueAct co-founder Jeffrey Ubben. Mr. Ubben has stopped trying to increase his net worth and is now focused on making the world a better place (at least according to his worldview). One…
Antony Michels
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Capital MarketsRisk Management
November 29, 2019

Concerns About the Transition from Libor to SOFR

(Editor’s Note–published November 29, 2019) Treasurers aren’t too happy about the fallback language for the Libor-to-SOFR switch. Members at a recent NeuGroup meeting used some colorful language in discussing the challenging issue of changing fallback language in contracts that currently use Libor, the benchmark rate that’s scheduled to disappear after 2021. The wording needs to specify what rate will replace Libor when it’s gone, what triggers the switch, and the pricing spread adjustment between Libor and the successor rate to…
Antony Michels
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BankingCapital MarketsComplianceRisk Management
December 17, 2010

Checklist: What You Should Know About ISDAs

Understanding the standard document used to govern over-the-counter derivatives transactions.Based on many discussions with practitioners in NeuGroup peer groups, here is a checklist of things to consider when implementing ISDA Master Agreements (ISDAs). One of the first considerations is whether it is worth bothering to set up an ISDA with every counterparty. Only value-add banks, please. With limited trading capacity to spread around—as well as treasury bandwidth—practitioners agreed that firms should focus on the banks that are able to add…
Antony Michels
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